Page 42 - A Level Business Studies - Financial Analysis Tasks

Task 4.h

Look at the trading section of the Income Statement and the Current Assets section of the
Statement of Financial Position to calculate the Receivables Days Ratio for Years 1 and 2.

Income Statement - Trading Account (Extract) - YEAR 1 Income Statement - Trading Account (Extract) - YEAR 2
£ £ £ £

Sales Revenue 1,647,808 Sales Revenue 1,856,745

Less Cost of Sales Less Cost of Sales
Opening Inventory (Stock) 45,112 Opening Inventory (Stock) 39,554
Add Purchases 873,465 Add Purchases 965,734
918,577 1,005,288
Less Closing Inventory (Stock) 65,334 853,243 Less Closing Inventory (Stock) 74,124 931,164
Gross Profit 794,565 Gross Profit 925,581

Statement of Financial Position (Extract) £ £ Statement of Financial Position (Extract) £ £
CURRENT ASSETS CURRENT ASSETS
Inventory (Stock) 65,334 Inventory (Stock) 74,124
Trade Receivables (Debtors) 254,778 Trade Receivables (Debtors) 149,435
Cash & Cash Equivalents (Cash & Bank) 15,456 Cash & Cash Equivalents (Cash & Bank) 2,134
335,568 225,693

Receivables Days Ratio Year 1 Days

Receivables Days Ratio Year 2 Days

Evaluate the Receivable Days Ratio between Yr 1 & Yr 2

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